KSE-100 soars 2.18% as positive triggers fuel sentiment

Positivity gripped the Pakistan Stock Exchange (PSX) on Wednesday as a strengthening rupee and upbeat developments on the International Monetary Fund (IMF) front pushed the benchmark KSE-100 index nearly 2.18% upward.

Moreover, a shrinking trade deficit owing to contraction in imports also lent support to the stock market.

At close, the benchmark KSE-100 Index recorded a gain of 877.26 points or 2.18% to end at 41,068.87.

During the day, the local currency recorded a historic gain of Rs9.58 or 4.19% against the US dollar to close at Rs228.8.

Imports declined by 38.31% on a monthly basis and clocked in at $4.861 billion in July 2022 compared to $7.88 billion in June 2022. This helped narrow down the trade deficit by 46.76% to $2.6 billion during the month.

Both developments, coupled with IMF’s statement a day ago, strengthened investor sentiments and helped the KSE-100 extend gains.

The IMF on Tuesday said Pakistan has completed the last prior action for the combined seventh and eighth review, adding that the board meeting is tentatively planned for late August once adequate financing assurances are confirmed.

KSE-100 gains 0.29% on IMF statement

Trading began with a spike and the KSE-100 index sustained the gains throughout the day. The increase steeped after mid-day and elevated the gain.

Index heavy automobile, cement, chemical, banks, oil, pharmaceutical and refinery sectors all finished positive.

“Statement from the IMF is driving the current positive sentiment,” said Sana Tawfik, vice-president research and a senior analyst at Arif Habib Limited (AHL), told Business Recorder.

“It is expected that Pakistan would receive IMF disbursements in the first week of September,” she said, adding that across the board buying is being witnessed.

“The PDL increase by the government results in two benefits, it leads to IMF prior actions being met, while also giving a relief to the market,” said Tawfik.

The analyst was of the view that a return of political clarity in the wake of the Election Commission of Pakistan (ECP) verdict on the prohibited funding case against the Pakistan Tehreek-e-Insaf (PTI) also bolstered confidence.

“However, pressure could be seen in the international markets as tension between China and the US escalates,” she added.

A report from Topline Securities stated local equities welcomed IMF’s acknowledgment regarding completion of all condition necessary to resume the Extended Fund Facility (EFF) programme.

On the economic front, Pakistan rupee posted historic appreciation of 4.19% against the greenback in the inter-bank market.

Meanwhile, sectors that helped the benchmark KSE-100 index move up included banking (201.16 points), cement (174.18 points) and oil and gas exploration (92.14 points).

Volume on the all-share index jumped to 333.03 million from 217.5 million on Tuesday. Similarly, the value of shares traded also soared to Rs10.02 billion from Rs6.33 billion recorded in the previous session.

WorldCall Telecom was the volume leader with 32.5 million shares, followed by TPL Properties with 29.2 million shares, and Unity Foods with 22.9 million shares.

Shares of 327 companies were traded on Wednesday, of which 258 registered an increase, 68 recorded a fall, and 22 remained unchanged.